The NCMO meeting of 18 December 2020
The fourth meeting of this year of the General Board of the National Committee for Macroprudential Oversight (NCMO) was held on 18 December 2020 by written procedure.
During the meeting, Board members examined analyses and adopted measures concerning macroprudential policy and systemic risk, namely the regular analysis on the recalibration of the countercyclical capital buffer.
In addition, the NCMO General Board was informed of: (i) the characteristics, manner of implementation and implications for financial stability of the measures taken to protect the real economy in response to the COVID-19 pandemic, (ii) the impact of funding plans of credit institutions on the flow of credit to the real economy, (iii) the solvency stress test results for the banking sector, and (iv) the systemic risks identified across the domestic financial system.
On this occasion, NCMO Recommendation No. R/9/2020 on the countercyclical capital buffer was unanimously approved. Considering the uncertainties about the future developments of the economy and of lending dynamics, at both aggregate and sectoral levels, the National Bank of Romania is recommended to maintain the countercyclical buffer rate at 0 (zero) percent. The decision to keep the CCyB rate at zero percent is in line with the fiscal, monetary and micro- and macroprudential supervisory measures taken at national and European level to maintain a sound capital and liquidity base for the banking sector with a view to supporting the real economy.
In addition, the NCMO General Board approved the agenda item on submitting to the European Systemic Risk Board (ESRB) the notifications regarding the implementation of certain recommendations, such as: (i) Recommendation ESRB/2015/1 on recognising and setting countercyclical buffer rates for exposures to third countries, (ii) Recommendation ESRB/2019/18 on exchange and collection of information for macroprudential purposes on branches of credit institutions having their head in another Member State or in a third country, (iii) Recommendation ESRB/2019/3 amending Recommendation ESRB/2016/14 on closing real estate data gaps, and (iv) Recommendation ESRB/2020/8 on monitoring the financial stability implications of debt moratoria, and public guarantee schemes and other measures of a fiscal nature taken to protect the real economy in response to the COVID-19 pandemic.
During the meeting, the NCMO General Board also approved NCMO Regulation No. 1/2020 amending and supplementing NCMO Regulation No. 2/2017 on the methodology and procedures used for setting capital buffers and the scope of these instruments, considering the need to harmonise the national regulatory framework with the provisions of Directive (EU) 2019/878 of the European Parliament and of the Council of 20 May 2019 amending Directive 2013/36/EU as regards exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures (CRD V). NCMO Regulation No. 1/2020 will be posted on the NCMO website.
The National Committee for Macroprudential Oversight was established by virtue of Law No. 12/2017 on the macroprudential oversight of the national financial system, thus ensuring that Recommendation of the European Systemic Risk Board (ESRB) No. 3/2011 on the macroprudential mandate of national authorities was implemented. The NCMO brings together representatives of the National Bank of Romania, the Financial Supervisory Authority and the Government of Romania. The NCMO’s mission is to ensure coordination in the field of macroprudential oversight of the national financial system by setting the macroprudential policy and the appropriate instruments for its implementation.